5 percent tax hike2 of 8Taxes currently are collected based on five income tax brackets. Every taxpayer would face a tax increase because the current 10 percent tax rate would disappear.That would mean that the first chunk of money earned -- up to $8,375 under 2010's tax brackets -- would be taxed at 15 percent.A bit higher on the income scale, covering what most tax policy analysts consider middle-income levels, the existing 25 percent tax rate would go to 28 percent and the 28 percent tax rate would become 31 percent.While the amount of income that would fall into each of these brackets next year is not finalized -- the IRS must wait for inflation numbers, as well as a Congressional decision on the tax rates themselves -- several tax policy groups have done their own calculations.These analyses use historical tax data, pending tax proposals and predicted inflation adjustments to evaluate what could happen if the existing tax rates expire. Related Articles:If Bush tax cuts expireAdjust your withholding2010 tax bracket ratesGetting full tax credit for kidsRelated Links:Pay no capital gains tax?Marriage and taxesTax filing for couples10 ways to save money advertisement
Taxes currently are collected based on five income tax brackets. Every taxpayer would face a tax increase because the current 10 percent tax rate would disappear.
That would mean that the first chunk of money earned -- up to $8,375 under 2010's tax brackets -- would be taxed at 15 percent.
A bit higher on the income scale, covering what most tax policy analysts consider middle-income levels, the existing 25 percent tax rate would go to 28 percent and the 28 percent tax rate would become 31 percent.
While the amount of income that would fall into each of these brackets next year is not finalized -- the IRS must wait for inflation numbers, as well as a Congressional decision on the tax rates themselves -- several tax policy groups have done their own calculations.
These analyses use historical tax data, pending tax proposals and predicted inflation adjustments to evaluate what could happen if the existing tax rates expire.
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